This is a smart way for Amazon to balance out demand on its delivery network during the holiday.

This is scary for Amazon's competitors, most of whom don't have this kind of giveaway to offer. Instead, they'll have to offer a straight discount on purchases, which erodes their pricing.

This is bad news for Amazon's investors, because effectively Amazon is making even less money from Prime members than the $79 a year they thought Amazon was getting.

This is good news for Amazon's investors, because if Prime is successful enough to place a burden on Amazon's shipping loads, that means it's signing up a lot of members, who will likely be loyal Amazon shoppers in the long term.

This is mixed news for Apple. On the one hand, Amazon is giving away music and movie downloads, which means more competition for iTunes. On the other hand, if Amazon was really successful in music and movies, it wouldn't feel the need to give credits away.

Disclosure: Jeff Bezos is an investor in Business Insider through his
personal investment company Bezos Expeditions.